AIMA Solved Assignments for FM11
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Subject Code: FM11
Subject Name: FINANCIAL AND MANAGEMENT ACCOUNTING
Component name: ASSIGNMENT 1
Assignment Start Date: 15/11/2022
Assignment End Date: 15/01/2023
Question 1:- The Material Mix variance calculated is Rs.3456 (A) and Material Usage variance is Rs.1234(F). What will you say about the Material Yield variance?
a) It will able zero
b) It will be favourable
c) It will be Rs.2,222 adverse
d) None of the above
Question 2:- All of the following are major considerations in fixing a selling price except-:
a) competitors price
b) product cost which set a ceiling to the price
c) price of substitutes
d) capturing market share
Question 3:- J Ltd. had furnished the following information pertaining to 45,000 units of products P-4 : Material Cost Rs 1,60,500 Labour Cost Rs 99,000 and Overhead costs Rs 1,74,120. The fixed portion of capital employed is Rs 1,35,000 and the varying portion is 40% of sales turnover. If the company desires to earn a profit of 12% on capital employed, the selling price of the product is?
a) Rs 11.55
b) Rs 10.50
c) Rs 9.55
d) Rs 12.20
Question 4:- Profit centers can _____.
a) only be used if an organization is decentralized in structure
b) only be used if an organization is centralized in structure
c) never be used by organizations regardless of their degree of centralization in decision making
d) be used in both centralized and decentralized organizations
Question 5:- Which of the following responsibility centers does not have accountability for revenues?
a) cost centers
b) investment centers
c) profit centers
d) None of the above
Question 6:- Prime cost plus variable overheads is……..
a) Cost of sales
b) Production cost
c) Cost of goods sold
d) Marginal cost
Question 7:- The equal percentage change in selling price per unit and variable cost per unit will cause the break even point in rupees to
a) Decrease by less than the percentage increase in selling price per unit
b) Decrease by more than the percentage increase in selling price per unit
c) Remain unchanged
d) Increase by the percentage change in variable cost per unit
Question 8:- FG Ltd. presents the following estimates pertaining to its department A: Sales Rs 7,00,000 , Fixed cost Rs 3,50,000 and Variable cost Rs.4,20,000. The value of sales to be increased by the company to reach the break even sales is ?
a) Rs 1,23,725
b) Rs 1,13,865
c) Rs 1,75,000
d) Rs 1,72,040
Question 9:- Which of the following items is not included in preparation of a cost sheet?
a) Carriage inwards
b) Purchase returns
c) Interest paid
d) Sales commission
Question 10:- In a decision analysis situation, which of the following costs is generally not relevant?
a) Incremental cost
b) Replacement cost
c) Avoidable cost
d) Historical cost
Question 11:- Ram Ltd. produces and sells 1,500 units of product L each month with total variable costs of RS 19,500 and total fixed costs Rs 19,500. Idle capacity would permit the acceptance of a special order for 1,000 units each month. The lowest acceptable selling price per unit of the product is
a) Rs 26.00
b) Rs 15.00
c) Rs 11.00
d) Rs 19.50
Question 12:- VBG Ltd. has developed the following standards for one of their products. Direct materials:20 pounds x £3 per pound. Materials purchased during the month: 600,000 pounds at £3.20 per pound. The materials price variance is _____.
a) £92,000 favourable
b) £112,000 unfavourable
c) £120,000 favourable
d) £92,000 unfavourable
Question 13:- The labour rate variance calculated is Rs.1357 (A) and the labour cost variance is Rs.3421(A). Which of the following is correct?
a) The labour usage variance will be Rs. 4778 (F)
b) The labour usage variance will be Rs. 4778 (A)
c) The labour usage variance will be Rs. 2064(F)
d) None of the above
Question 14:- The following data is obtained from the records of the Alum Ltd. Sales First year 1,28,000 & Second year 1,44,000. Profit for first year 16,000 and second year 22,400. The break even sales of the company in rupees is
a) Rs 90,000
b) Rs 88,000
c) Rs 1,30,000
d) RS 1,36,000
Question 15:- For the purpose of planning and control , costs are classified as
a) Product and period costs
b) Normal and abnormal costs
c) Budgeted and standard costs
d) Historical and predetermined costs
Question 16:- A profit making firm can increase its return on investment by …….
a) Increasing sales revenue and operating expenses by the same amount in rupees
b) Decreasing sales revenue and operating expenses by the same percentage
c) Increasing sales revenue and operating expenses by the same percentage
d) Decreasing investment and sales by the same percentage
Question 17:- Which of the following is a financial measure?
a) number of defects
b) required return on investments
c) number of customer complaints
d) amount of wasted materials by employee
Question 18:- Which of the following factors is to be multiplied with contribution margin ratio to calculate profit?
a) Unit contribution margin
b) Margin of safety
c) Unit sales price
d) Change in sales volume
Question 19:- Anil Ltd. has furnished following data pertaining to its business: Variable cost Rs 95 per unit, Fixed overhead Rs 20 per unit, Normal production 10,000 unit , Actual production 8,000 unit , sales 6,000 units , sales price Rs 140 per unit. The value of ending inventory using absorption costing is
a) Rs 4,80,000
b) RS 2,30,000
c) Rs 1,90,000
d) Rs 2,40,000
Question 20:- If a company desires to earn a profit of 25% on selling price, the profit mark up on cost should be
a) 20.00%
b) 30.00%
c) 50.00%
d) 33.33%
Subject Code: FM11
Subject Name: FINANCIAL AND MANAGEMENT ACCOUNTING
Component name: ASSIGNMENT 2
Question 1:- Which of the following is an example of a cost center?
a) a subsidiary
b) an accounting department
c) a division
d) a plant
Question 2:- S Ltd. has furnished the following standard cost data per unit of output. Direct labour 5 hours at Rs 7.50 per hr. Direct wages paid Rs 2,03,500 for 27,500 hours Actual output 4,900 units. The labour rate variance is:
a) Rs 2,750, (A)
b) Rs 2,750, (F)
c) Rs 2,850, (F)
d) None of the above
Question 3:- R Ltd. currently operates at 60% capacity level. The normal capacity is 3,00,000 units. The variable cost per unit is Rs.33 and the total fixed costs are Rs.18,60,000. If the company desires to earn a profit of Rs.3,00,000, the sale price of the product per unit is?
a) Rs.35.00
b) Rs.40.00
c) Rs.45.00
d) Rs.25.00
Question 4:- If a company desires to earn a profit of 25% on selling price, the profit mark-up on cost should be
a) 66.33%
b) 66.67%
c) 25.00%
d) 33.33%
Question 5:- The profit-volume ratio will be reduced by…..
a) Reducing the variable costs
b) Reducing the sales mix of low profit-volume products
c) Increasing the selling price and variable cost with equal percentage
d) Increasing the selling price and variable cost with equal amount
Question 6:- From the following information calculate break even sales of A Ltd. Margin of safety (representing 20% of sales) Rs.15,000, P/V Ratio 40%.
a) Rs.50,000
b) Rs.70,000
c) Rs.60,000
d) Rs.45,000
Question 7:- The equal percentage change in selling price per unit and variable cost per unit will cause the breakeven point in rupees to
a) Remain unchanged
b) Decrease by the percentage change in selling price per unit
c) Decrease by less than the percentage increase in selling price per unit
d) Increase by the percentage change in variable cost per unit
Question 8:- Which of the following statements is true?
a) If marginal costing technique is used, only variable costs are charged to products.
b) In marginal costing technique, a portion of fixed overheads is carried over to the next period.
c) In marginal costing, under or over absorption of fixed overheads is bound to arise.
d) Marginal costing and absorption costing are the same.
Question 9:- A sunk cost is…….
a) Relevant to short-term decision making
b) Irrelevant to decision making
c) Relevant to long-term decision making
d) A common fixed overhead cost
Question 10:- Material yield variance is favourable if the
a) Actual output exceeds over standard output.
b) Standard output is more than actual output.
c) Standard quantity for the actual output exceeds actual quantity
d) Actual quantity exceeds standard quantity for actual output
Question 11:- A Ltd. has furnished the following standard cost data per unit of output. Direct labour 10 hours at Rs 7.50/hr. Direct wages paid Rs 4,07,000 for 55,000 hours worked per hour at Rs 7.40 per hour Actual output 4,900 units. The labour efficiency variance is
a) Rs 35,000 (Adverse)
b) Rs 45,000 (Favourable)
c) Rs 35,000 (Favourable)
d) Rs 45,000 (Adverse)
Question 12:- Notional rent charged on business premises owned by the proprietor is an example of
a) Discretionary cost
b) Imputed cost
c) Programmed cost
d) Replacement cost
Question 13:- K Ltd. has provided the following information for its product for a period: Direct materials Rs. 65,200Direct wages 53,300,Direct expenses Rs. 56,500,Manufacturing overhead costs Rs. 37,200 Administrative overhead costs Rs.27,600. The prime cost of the product was?
a) Rs.1,55,700
b) Rs.1,75,000
c) Rs.2,12,200
d) Rs.2,00,200
Question 14:- The opportunity cost of making a component in a factory with no excess capacity is the……
a) Fixed manufacturing cost of the component
b) Cost of production given up in order to manufacture the component
c) Total manufacturing cost of the component
d) Net benefit given up from the best alternative use of the capacity
Question 15:- Classifying a cost as either direct or indirect depends upon…….
a) The ability to specifically identify the cost with cost object
b) The relevance of the cost for decision making
c) The controllability of cost
d) The normality of the cost
Question 16:- B Ltd. manufactures 1,200 units of product `P` during the year 2018-19. The variable cost per unit and fixed costs per annum are Rs.35 and Rs.45,000 respectively. If the company expects an annual profit of Rs.30,000, the mark-up percentage on variable cost is
a) 178.57%
b) 171.43%
c) 107.14%
d) None of the above
Question 17:- Welcome Ltd. produces and sells a product ‘Nify’. The company has a P/V ratio of 20%. The company incurs Rs.1,20,000 as fixed cost per annum and its present sales are Rs.90,000 per month. The fixed cost is likely to increase to Rs.1,35,000 and the variable cost is expected to increase by 5% for the next period. The percentage increase in selling price required to maintain the existing level of profit is
a) 4.39%
b) 5.49%
c) 5.39%
d) None of the above
Question 18:- The term relevant cost applies to all the following decisional situations, except
a) Deletion of a product line
b) Manufacture or purchase of component parts
c) Determination of a product price
d) Acceptance of a special order
Question 19:- If the total cost for producing 1000 units is Rs. 12000, and for 1100 units, it is 12,000; the nature of cost is?
a) Variable Cost
b) Semi Variable cost
c) Fixed Cost
d) The information is not sufficient
Question 20:- Vaishali Ltd. has furnished the following data pertaining to its business: Variable Cost – Rs.38 per unit; Fixed Overhead – Rs.8 per unit; Normal Production – 15,000 units; Actual Production – 12,000 units; Sales – 10,000 units; Sales price – Rs.60 per unit. The value of ending inventory using Absorption costing is?
a) Rs.90,000
b) Rs.86,000
c) Rs.92,000
d) Rs.96,000